Filed Pursuant to Rule 424(b)(3)

Registration No. 333-133652

 

GRUBB & ELLIS HEALTHCARE REIT, INC.

 

 

SUPPLEMENT NO. 10 DATED JUNE 13, 2008
TO THE PROSPECTUS DATED DECEMBER 14, 2007

 

This document supplements, and should be read in conjunction with, our prospectus dated December 14, 2007, as supplemented by Supplement No. 1, dated January 4, 2008, Supplement No. 2, dated January 30, 2008, Supplement No. 3, dated February 12, 2008, Supplement No. 4, dated February 27, 2008, Supplement No. 5, dated March 17, 2008, Supplement No. 6, dated April 7, 2008, Supplement No. 7, dated April 24, 2008, Supplement No. 8, dated May 7, 2008 and Supplement No. 9, dated June 2, 2008, relating to our offering of 221,052,632 shares of common stock. The purpose of this Supplement No. 10 is to disclose:

 

 

Status of Our Initial Public Offering

 

As of May 23, 2008, we had received and accepted subscriptions in our offering for 33,558,755 shares of our common stock, or approximately $335,202,000, excluding shares issued under our distribution reinvestment plan.

 

Acquisition of Nutfield Professional Center

 

On June 3, 2008, we, through our subsidiary, G&E Healthcare REIT Nutfield Professional Center, LLC, acquired a fee simple interest in Nutfield Professional Center located in Derry, New Hampshire, or the Nutfield property, from an unaffiliated third party for a purchase price of $14,200,000, plus closing costs.

 

Financing and Fees

 

We financed the purchase price of the Nutfield property with $14,800,000 in borrowings under our secured revolving line of credit with LaSalle Bank National Association, or LaSalle, and KeyBank National Association, or KeyBank, as disclosed in our prospectus. An acquisition fee of $426,000, or 3.0% of the purchase price, was paid to our advisor and its affiliate.

 

Description of the Property

 

The Nutfield property is a Class B medical office building consisting of 22 condominium units. Built in 1963 and renovated in 1990 and 1996, the Nutfield property consists of approximately 70,000 square feet of gross leaseable area. The Nutfield property is 100% master-leased to HCA Health Services of New Hampshire, Inc., a provider of healthcare services, which is responsible for all capital and operating expenses of the Nutfield property. The rental rate per lease year for 2008 is approximately $1,140,000, or $16.29 per square foot. The rental rate per lease year for 2018, the year the lease expires, will be approximately $1,362,000, or $19.46 per square foot.

 

The Nutfield property’s closest comparable property is located in North Andover, Massachusetts, approximately 21 miles away from the Nutfield property.

 

Triple Net Properties Realty, Inc. serves as the property manager and provides services and receives certain fees and expense reimbursements in connection with the operation and management of the Nutfield property.

Management currently has no renovation plans for the Nutfield property and believes that the Nutfield property is suitable for its intended purpose and adequately covered by insurance. For federal income tax purposes, we estimate that the depreciable basis in the Nutfield property will be approximately $13.4 million. We depreciate buildings based upon an estimated useful life of 39 years. For 2007, the Nutfield property paid real estate taxes of approximately $147,000 at a rate of 2.21%.

 

The following table shows the average occupancy rate and the average effective annual rental rate per square foot for the Nutfield property for the last five years:

 

 

Prior Performance Tables

 

Table II — Private Programs in the prior performance tables contained in our prospectus, as disclosed in Supplement No. 7 to our prospectus, is hereby updated and supplemented by the following table:

 

TABLE II
COMPENSATION TO SPONSOR (UNAUDITED)
PRIVATE PROGRAMS
December 31, 2007

 

Table II presents the types of compensation paid to Grubb & Ellis Group and its affiliates on a cash basis in connection with prior programs during the three years prior to December 31, 2007. As of December 31, 2007, there were 197 private programs which paid compensation to Grubb & Ellis Group and its affiliates during the preceding three years. 103 private program offerings closed in the past three years. As of December 31, 2007, there were 14 affiliated investments by public programs in 11 private programs, one of which closed in the three years prior to December 31, 2007. For programs with affiliated ownerships, the pro rata share of payments relating to affiliated ownerships are aggregated and disclosed in Table II. Table II further discloses the impact of the pro rata share of aggregate affiliated ownership payments on total payments to sponsor by excluding amounts relating to public program (affiliated) ownership in private programs. 94 of the Other Programs made payments to Grubb & Ellis Group and its affiliates in the three years prior to December 31, 2007, 77 of the Other Programs closed prior to December 31, 2004 and 17 of the Other Programs remained open as of December 31, 2007.